COURT FILE NO.: CV19-0184

DATE: July 4, 2022

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

LEEDS STANDARD CONDOMINIUM CORPORATION NO. 41

Applicant

– and –

TALL SHIPS LANDING DEVELOPMENTS, a division of METCALFE REALTY COMPANY LIMITED

Respondent

Jonathan Wright, for the Applicant

Nadia J. Authier for the Respondent

RULING ON MOTION

ABRAMS, J

Introduction

[1] The Applicant, Leeds Standard Condominium Corporation No. 41 (“LSCC 41”), brings this motion for an Order compelling Tall Ships Landing Developments, a division of Metcalfe Realty Company Limited (“TSL”) to compel answers to questions that were improperly refused during Mr. Fuller’s cross examination.

[2] The Respondent, TSL, opposes the relief sought on the basis that the questions refused at the cross-examination were either: (a) related to the expenses of the Shared Amenities which form part of the Allocated Shares of the Shared Amenity Costs; (b) improper; or (c) generally irrelevant.

[3] As the case management judge, I have been tasked with deciding several interlocutory matters arising from the Application. For the sake of continuity, I think it helpful to repeat the background and procedural history to provide context relative to the within motion.

Brief Background

The Parties

[4] TSL is the owner and developer of lands which became the Tall Ships Landing development located at 15 St. Andrew Street, Brockville, Ontario. The development consists of three phases. Phase I includes a mixed-use condominium project, consisting of a 16-storey residential condominium tower set above a 4-storey podium and a marina. The podium contains the Amenity Structure, which is owned by TSL. Construction of Phases II and III has not yet commenced.

[5] The Amenity Structure is located on floors 1-4 of the podium as identified and defined in the Shared Amenities Agreement (“SAA”). The Amenity Structure contains the Shared Amenity Areas, together with other areas not forming part of the Shared Amenity Areas. The Shared Amenity Areas includes the hot pools, swimming pool, washroom/change facilities, fitness room, clubhouse, lobby/reception area, billiard room, party room, three guest rooms and an outdoor terrace with barbeques.

[6] The management, right of use, operation, maintenance and repair of the Shared Amenities and Shared Services are governed by the SAA, which is registered on title to the property. The parties to the SAA are TSL as Amenity Owner, TSL as Owner of the Phase II and III lands and LSCC 41.

[7] LSCC 41 is a non-profit condominium corporation created pursuant to the Act. LSCC 41 is responsible for the management and administration of its own condominium property, as well as a portion of the Shared Facilities and Amenities.

[8] In accordance with the SAA, the residential unit owners of LSCC 41 have a right of access and use of the Shared Amenity Areas and are required to pay, as part of their common expenses, a fee for this right of access and use (LSCC 41’s Allocated Share of the Shared Amenity Costs).

Litigation – Procedural History

[9] In September 2016, LSCC 41 commenced an Application in Toronto.

[10] In July 2018, TSL brought a motion to dismiss the Application for delay. The proceeding was ultimately adjourned sine die based on LSCC 41’s representation that it would bring a motion to convert the Application into an Action and consolidate it with a separate Action commenced by LSCC 41 in respect of the Shared Facilities Agreement entered into by the parties and the City of Brockville (the “SFA Action”).

[11] The Court subsequently stayed the SFA Action in favour of Arbitration and declined to consider LSCC 41’s requested relief in respect of the proceeding. LSCC 41’s appeal of the order was eventually quashed by the Court of Appeal.

[12] In August 2019, TSL commenced a parallel Action to recover arrears allegedly owed to it by LSCC 41 pursuant to the SAA (the “SAA Arrears Action”).

[13] In October 2019, LSCC 41 delivered its Notice of Motion seeking, inter alia, an order staying the SAA Arrears Action. In support of the relief requested, LSCC 41 contended that the SAA Arrears Action should be stayed on the basis that, inter alia: i) it was premature; and ii) the issues were subject to an ADR clause, which acts as a condition precedent to proceeding with the Action, or alternatively compels the parties to proceed by way of arbitration.

[14] In December 2019, TSL obtained an Order transferring the proceeding to Brockville, when I was assigned as the case management judge.

[15] In March 2020, I established a timetable for the proceeding that contemplated a) LSCC 41 bringing a motion to refer the proceeding to arbitration; and b) failing such a motion, the completion of the various procedural steps in this proceeding by August 31, 2020.

[16] In June 2020, I heard LSCC 41’s motion to stay the SAA Arrears Action and reserved my decision.

[17] On October 20, 2020, LSCC 41 delivered its Amended Amended Notice of Application (“Amended Amended NOA”), in which it, inter alia, abandoned its claim for damages in respect of its alleged overpayment of expenses under the SAA and instead requested an order for directions pertaining to the determination of all issues of the parties’ over/underpayment of SAA expenses by way of arbitration, specifically:

1(k) An order providing directions to the Applicant and Respondent so that they may address any residual issues regarding expenses; including, but not limited to, whether there has been an overpayment and/or underpayment of LSCC 41’s Allocated Share Amenities Costs from registration to the date of any order by this Court by way of Arbitration before Mr. Leslie Dizgun.

[18] Notably, LSCC 41 struck out the last sentence of 1(k), which read: Respondent pay to the Applicant damages equivalent to any overpayment or LSCC 41’s Allocated Share of the Shared Amenity Costs to date.

[19] At the return of the motion to stay the SAA Arrears Action, LSCC 41 argued that the SAA Application would have a direct impact on the SAA Action. If the SAA Application is successful, either: i) the SAA will be terminated; ii) the parties will be ordered to negotiate a new SAA; or iii) the Court could impose a new SAA. Further, the outcome of the SAA Application would ultimately affect the Parties’ obligations related to the Shared Amenities, including expenses, as LSCC 41 asserted.

[20] On October 22, 2020, I released my decision in relation to the motion to stay the SAA Arrears Action. In sum, the Action was stayed until the Court can adjudicate LSCC 41’s SAA Application, and until the time for any potential appeal of the SAA Application has expired. I also ordered that upon the expiration of the stay, TSL would be permitted to proceed with the SAA Action by way of Arbitration.

[21] Thereafter, LSCC 41 brought a motion seeking leave to issue a Fresh as Amended Notice of Application, in which it claimed, inter alia, an order for damages, including, but not limited to damages and/or any other relief available to it in accordance with Section 135 of the Act.

[22] TSL opposed LSCC 41’s proposed amendment, but only insofar as the amendment incorporated into the Application a claim for any alleged overpayment in respect of SAA expenses.

[23] On July 26, 2021, I released my decision allowing LSCC 41 to have issued a Fresh as Amended Notice of Application, which may include a claim for damages; however, it shall not incorporate into the Application a claim for any alleged overpayment in respect of SAA expenses. As I reasoned, to allow a claim for alleged overpayments would be contrary to the Courts’ earlier decision that issues of that nature be remitted to the Arbitrator for determination.

[24] It bears repeating that when I took over carriage of the matter in March 2020, counsel assured the Court that the case was essentially hearing ready requiring only a timetable, which contemplated: 1) LSCC 41 bringing a motion to refer the proceeding to arbitration; and 2) failing such a motion, the completion of the various procedural steps in this proceeding by August 31, 2020. To borrow a word from RSJ MacLeod in Friends of Lansdowne v. Ottawa, 2011 ONSC 1015, the parties have become “enmeshed” in procedural wrangling over the past two years that has done little, if anything, to move the matter closer to resolution.

Issues

[25] In my view, the issues to be determined on this motion are:

(a) were the questions refused at the cross-examination related to the expenses of the Shared Amenities, which form part of the Allocated Shares of the Shared Amenity Costs (arbitral issue);

(b) improper; or

(c) generally irrelevant.

Parties Positions

[26] LSCC 41 admits that the financial consequences of any oppressive acts are to be addressed in the Arbitration. However, without the production of documents such as timesheets/logs, invoices, contracts, purchase orders and other records substantiating the SAA’s operations since inception, LSCC 41 contends that it will not be able to present the evidence to prove its case, because the statements made in the Applicant’s Affidavit(s) will not have the supporting documentation to substantiate them.

[27] TSL asserts that because of LSCC 41 removing the costing issues following its amendment of the Notice of Application and given that this Court has found that the costing issues must be arbitrated after this proceeding, the few remaining answers sought by LSCC 41 are generally irrelevant to the matters to be decided in the Application, or improper.

Analysis and Conclusions

[28] On May 23, 2022, I provided a hand-written endorsement dismissing LSCC 41’s motion. These are my reasons for doing so.

Rule 37.10(10)(a)(i)

[29] First, the Refusals Chart prepared by LSCC 41 does not refer to a single paragraph within its Fresh as Amended Notice of Application or the affidavits filed by LSCC 41 in its Application Record to demonstrate the relevance of the subject of the refusals to the matters in issue. Notably, Rule 37.10(10)(a)(i) of the Rules of Civil Procedure requires that the moving party serve a refusal chart that sets out “the issue that is the subject of the refusal or undertaking and its connection to the pleadings or affidavit.” In my view, the failure to provide this information precludes the Court from making any determination on relevancy. On that basis alone, LSCC 41’s motion is dismissed.

Rule 38

[30] Second, it bears repeating that the matter is proceeding as an application under Rule 38 of the Rules of Civil Procedure. There are no rights of examinations for discovery in an application. Moreover, the motion is in respect of refusals following a cross-examination on Mr. Fuller’s affidavit filed in response to the Application.

[31] In Ontario v. Rothmans Inc. 2011 ONSC 2504, at para. 143, Perell J. summarized the principles applicable to cross-examination of a deponent for an application or motion on an affidavit, where he said:

• The scope of a cross-examination of a deponent for an application or motion is narrower than an examination for discovery;
• A cross-examination is not a substitute for examinations for discovery or for the production of documents available under the Rules of Civil Procedure;
• The examining party may not ask questions on issues that go beyond the scope of the cross-examination for the application or motion;
• The questions must be relevant to: (a) the issues on the particular application or motion; (b) the matters raised in the affidavit by the deponent, even if those issues are irrelevant to the application or motion; or (c) the credibility and reliability of the deponent’s evidence;
• If a matter is raised in, or put in issue by the deponent in his or her affidavit, the opposite party is entitled to cross-examine on the matter even if it is irrelevant and immaterial to the motion before the court;
• The proper scope of the cross-examination of a deponent for an application or motion will vary depending upon the nature of the application or motion;
• A question asked on a cross-examination for an application or motion must be a fair question;
• The test for relevancy is whether the question has a semblance of relevancy;
• The scope of cross-examination in respect to credibility does not extend to a cross-examination to impeach the character of the deponent;
• The deponent for an application or motion may be asked relevant questions that involve an undertaking to obtain information, and the court will compel the question to be answered if the information is readily available or it is not unduly onerous to obtain the information; and
• The deponent for a motion or application who deposes on information and belief may be compelled to inform himself or herself about the matters deposed.

The Scope of a Cross-examination of a Deponent for an Application.

[32] LSCC 41 produced, as part of its materials on the motion, the transcript of Mr. Fuller’s cross-examination. Upon review of the transcript, in my view counsel for LSCC 41 conducted a quasi-examination for discovery, as opposed to a cross-examination on the affidavit. Specifically, the questions asked and refused were overly broad and did not relate to the matters deposed to in the affidavit of Mr. Fuller, the issues raised in the Fresh as Amended Notice of Application or the affidavits filed by the Applicant.

A Cross-examination is Not a Substitute for Examinations for Discovery.

[33] Again, the questioning of Mr. Fuller was more in keeping with an examination for discovery rather than a cross-examination on his affidavit. As a result, none of the questions in dispute (save for one) relate to specific paragraphs in Mr. Fuller’s affidavit.

The Examining Party May Not Ask Questions on Issues That Go Beyond the Scope of the Cross-examination.

[34] In my view, the questions refused went beyond the scope of the cross-examination for the Application largely because they relate to obtaining back-up documents for the revenues and expenses of the Shared Amenities, which the Court earlier decided must be determined by way of Arbitration. By continuing to raise the issue of costing of the Allocated Shares of the Shared Amenity Costs and overpayment within the Application, LSCC 41 attempts to obtain through the backdoor what it was prohibited from obtaining through the front door. With respect to the few questions that did not pertain to the Shared Amenities, they were either irrelevant or improper.

The Scope of Cross-examination in Respect to Credibility Does Not Extend to a Cross-examination to Impeach the Character of the Deponent.

[35] I agree that the question asked at page 95 of the transcript, Q.213 was clearly asked for the sole purpose of attempting to impeach the character of Mr. Fuller, which is verboten. Thus, the question was clearly improper and need not have been answered.

[36] In summary, I find that the refusals fall into three categories:

(a) Generally irrelevant – Q.76; Q. 327.

(b) Improper – Q. 105-106, Q. 147-148, Q. 174-175, Q. 213, Q.362

(c) Related to the expenses and revenues of the Shared Amenities and their allocation as between TSL and LSCC 41 (arbitral issue) – Q.55, Q. 107, Q.122-123, Q. 124, Q. 209, Q. 299-301, Q.340, Q.351.

[37] A final word on the litigation. LSCC 41’s vacillating position on the matters of cost allocation (non-payment v. overpayment) under the SAA and oppression is perplexing. Having achieved a tactical advantage by persuading this Court at an earlier motion to stay TSL’s SAA arrears action by claiming that the issue must be arbitrated, LSCC 41 made an about-turn asserting that its alleged overpayments must form part of its claim for damages in this proceeding, which the Court denied. Moreover, LSCC 41 admits that the financial consequences of any oppressive acts are to be addressed in the Arbitration, yet it asserts here that it will not be able to present the evidence to prove its case [of oppression] unless Mr. Fuller is compelled to answer questions that were refused.

[38] As I pointed out in my reasons staying TSL’s SAA arears action, I find the decision of Mew J. in Metropolitan Toronto Condominium Corp. No. 965 v. Metropolitan Toronto Condominium Corp. No. 1031 et al., ONSC 5362 to be of assistance, where he said at para. 19:

Furthermore, even if the plaintiff is correct and oppression remedy disputes are not arbitrable, an arbitral tribunal considering its jurisdiction over the present dispute would doubtless want to take into account what the true nature of the dispute between the parties consists of. Is the dispute in fact an oppression case or is it in pith and substance a dispute arising “under or in relation to” the SFA?

[39] Again, I agree with Mew J’s reasoning. LSCC 41 is free to pursue its claim of oppression at the arbitration that is to follow, without any fear of prejudice. Further, counsel for TSL gave her assurance on the record that her client would not object to LSCC 41 raising oppression at the arbitration.

[40] The matter is set for a two-day hearing with Mew J. on August 22 and 23, 2022, marked peremptory on all to proceed. No small effort was required to arrange the hearing with Mew J. prior to his scheduled study leave. The matter must proceed as scheduled.

[41] The parties have agreed that the costs of this motion are to be determined in the cause.

The Honourable Mr. Justice B. W. Abrams

Released: July 4, 2022

COURT FILE NO.: CV19-0184

DATE: 4 Jul 2022

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

LEEDS STANDARD CONDOMINIUM CORPORATION NO. 41

Applicant

– and –

TALL SHIPS LANDING DEVELOPMENTS, a division of METCALFE REALTY COMPANY LIMITED

Respondent

RULING ON MOTION

Abrams, J.

Released: July 4, 2022